Cost triples, delays mount for UC computer system upgrade

University of California President Janet Napolitano listens to speakers at a UC Board of Regents meeting in San Francisco on Jan. 22, 2014. Jeff ChiuAssociated Press file

University of California President Janet Napolitano listens to speakers at a UC Board of Regents meeting in San Francisco on Jan. 22, 2014. Jeff ChiuAssociated Press file

The timeline for a massive upgrade to the University of California’s payroll and personnel system was extended again twice in the past two months, further delaying a project now expected to cost more than three times its original budget.

In February, the university pushed back its launch date at a first wave of sites to December from August; two subsequent phases of the rollout were then moved the following month, to July 2018 and December 2018, respectively.

That would ultimately put the payroll system, UCPath, more than four years behind schedule – longer that it was originally supposed to take.

In a statement, UC spokesman Ricardo Vazquez said the university postponed the initial launch again because “additional testing was needed in the most complex part of the work, which involves converting data from the old payroll systems into UCPath.”

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“Though the conversion cycle itself typically lasts only five weeks, the time needed for this extra test cycle pushed the project close to the university’s annual Open Enrollment cycle” for health insurance, he said, “which would have added complexity and risk to this deployment effort.”

UCPath – which stands for payroll, academic personnel, timekeeping and human resources – was formally launched in September 2011, with a 36-month timeline to combine UC’s 195,000 employees into a single system. Budgeted at $156 million, university officials argued it was a necessary upgrade to outdated, 30-year-old payroll technology and would eventually save them more than $100 million per year.

But deadline after deadline has come and gone as UC struggled to integrate the business processes of its 10 campuses, five medical centers and central administration. Though 1,800 employees in the Office of the President have been receiving paychecks through the system since January 2016, UCPath has yet to go live at any of the other sites.

With the latest revision to its schedule, Vazquez said, the project is estimated to cost $504 million, including a $26 million contingency “to accommodate any unexpected large expenses in the final year of the project budget” that may not be used. The university has spent $327 million so far.

“Now that design has been completed and UCPath is into the testing phase, the university’s ability to accurately project the total cost has improved,” Vazquez said, citing additional staff as the primary contributor to the increase.

Michael Krigsman, an IT industry analyst at CXOTalk.com, said it’s better for UC to delay the payroll system than be stuck unable to issue paychecks for months. But he questioned how the university had gotten so far off track and what it would do in the future to avoid repeating those mistakes.

“A project that is three times its original size either rests on very shaky foundation or they changed the plan along the way, which indicates a poor understanding of the problem it was trying to solve,” he said. “That’s a pretty lame excuse.”

University of California President Janet Napolitano told The Sacramento Bee Editorial Board that UC's six-year tuition freeze is unsustainable.

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